Coinbase: A Directional Bitcoin Bet

Coinbase Global, Inc. (NASDAQ:COIN) is benefiting from a rise in transaction and service revenues as sentiment in the cryptocurrency market has significantly improved lately.

Coinbase Global, Inc. (NASDAQ:COIN) stock is up 60% year-to-date, outperforming the broader markets and key cryptocurrency holdings like Bitcoin. The outperformance is largely on the back of a strong recovery in transaction and service revenues, which had come under pressure last year as crypto prices fell sharply.

Now, with retail traders still key to the platform’s growth and considering the material improvements in Coinbase’s fundamentals, several analysts are bullish on the stock, with some even suggesting that COIN stock could double from current levels.

Here's a closer look at the key factors driving optimism in Coinbase stock and some analyst price targets for the stock.

Coinbase stock soared 20% in premarket trading on Thursday after the cryptocurrency exchange reported better-than-expected fourth-quarter results and said it was seeing "early signs of recovery" in retail trading volumes.

Coinbase reported a loss of $2.43 per share for the quarter, narrower than the average analyst estimate of a loss of $2.54 per share, according to Refinitiv data. Coinbase also reported adjusted revenue of $629.1 million for the quarter, beating analyst estimates of $580.6 million.

The narrower-than-expected loss and beat on revenue came despite a 14% decline in total trading volume on the platform, year-over-year. However, the decline in trading volume was largely expected, considering the downturn in the cryptocurrency market last year.

Importantly, Coinbase highlighted a "recovery in retail trading volumes" towards the end of the quarter and early into the first quarter, which drove a "reversal of the decline in total trading volume."

Coinbase also said it was seeing "early signs of recovery in retail engagement," with an increase in new retail users and higher trading frequency among existing users.

Overall, the strong performance from Coinbase in Q4 was largely driven by a strong recovery in transaction and service revenues, which had come under pressure last year as crypto prices fell sharply.

Coinbase stock is now up 60% year-to-date, outperforming the broader markets and key cryptocurrency holdings like Bitcoin. The outperformance is largely on the back of the strong recovery in transaction and service revenues.

Now, several analysts are bullish on the stock, with some even suggesting that COIN stock could double from current levels.

For instance, Needham analyst John Todaro maintained a Buy rating on Coinbase and hiked his price target on the stock to $100 (from $70 previously), implying a potential upside of 100% from current levels.

"Coinbase is firing on all cylinders and is the clear beneficiary of the crypto recovery," Todaro wrote in a note to clients.

"The stock trades at just 2.5x 2025E revenue, a trough multiple that we believe will expand materially as Coinbase continues to execute and generate outsized free cash flow."

Meanwhile, KeyBanc analyst Josh Beck maintained an Overweight rating on Coinbase and increased his price target on the stock to $75 (from $60 previously).

"Coinbase is seeing early signs of a recovery in retail trading volumes, which is driving a reversal of the decline in total trading volume,"

"Coinbase also highlighted early signs of recovery in retail engagement with an increase in new retail users and higher trading frequency among existing users. We believe Coinbase is well-positioned to benefit from the recovery in the crypto market."

Coinbase stock has soared this year as the price of Bitcoin and other major cryptocurrencies has recovered from the sharp sell-off in 2022. Coinbase, the largest cryptocurrency exchange in the United States, is seen as a barometer of the health of the digital asset market.

Coinbase stock is now trading at around $50, up from a low of $30 at the beginning of the year. The stock hit an all-time high of over $350 in April 2021.

Coinbase stock is up sharply this year, outperforming the broader markets and key cryptocurrency holdings like Bitcoin. The outperformance is largely on the back of the strong recovery in transaction and service revenues.

Now, several analysts are bullish on the stock, with some even suggesting that COIN stock could double from current levels. For instance, Needham analyst John Todaro maintained a Buy rating on Coinbase and hiked his price target on the stock to $100.